Is Innovation Enough?

After 15 years of working with clients at the intersections of brand, innovation, and design, it wasn’t easy to admit that many of the facets of my worldview needed refocusing. It’s also hard to deny gut feelings. What kept making that journey from gut to intellect was the sense that:

innovation is not a guarantee of future success.

brand loyalty is a relic—brands are only as strong as the value they provide based on the customer’s needs (and expectations).

Arguing against the value of innovation, especially if you are a creative problem solver with natural curiosity, is a difficult position to take. And to a marketer or a designer, brand is very seductive (even if it’s difficult to explain exactly what brand really is, and how it works, in any kind of empirically reproducible way).

But when the gut begins to arm itself with facts, it’s time to listen.

Of the 25% of new product innovations that ever reach commercial launch, only 45% meet profit goals— that’s an 11% success rate.

The allure of innovation has always been in the chance of finding the next “big thing” but businesses can find themselves on the treadmill of relentless innovation as markets mature or technology advances. Innovation has a poor track record of delivering commercial success for businesses.

Clear colas, Frito-Lay Lemonade, Apple’s Newton, and inhalable insulin are just a few examples of products that failed to deliver results to the companies that invested in them. Often the first-wave of innovation is the sacrifice that enables potential success of the second-wave. Beta-max paved the way for VHS and the iPod was far from the first MP3 player. Many products and services will die, struggling to find a real market.

Yet innovation is needed as the environment around a business changes. There is a range of ways to approach innovation; is there a way to optimize one’s portfolio of innovation efforts?

Poor customer experiences result in defections and abandoned purchases that cost US businesses an estimated $83 Billion each year.

The numbers are scary: over 75% of potential purchases are not completed because of poor experiences. Defection or churn is persistent. Clearly, selling people on a brand isn’t the same as them buying the product. And unilaterally defining a brand does not create loyalty the way it did in the past.

Great customer experience is both a necessity and an advantage as competition for customers intensifies. Unfortunately those that use this to their advantage are often the nimble start-ups who emerge free from legacy constraints. They often set the bar higher than many pre-existing businesses will be able to meet.

Yet the growing complexity of operating in the omni-channel world where the customer relationship is always on, makes understanding—let alone improving and existing customer experience a challenge for all.

The journey a customer has with a business typically crosses multiple functions and managers. Most of these focus on ensuring the integrity of their domain, at the expense of coherency across all. Customers often wind up dealing with a headless beast of experiences, where inefficient communication, byzantine issue resolution policies, and lack of any overall accountability are common.

Brands such as Apple, Virgin, Disney, and Ikea have had tremendous success tapping into customer needs and delivering experiences that delight and engage. Many businesses make the mistake of assuming that superficial design efforts can provide similar benefits. But the age of image as brand is closing and fixing the experience at the 11th hour through brilliant design cannot create value that doesn’t exist.

Connecting the dots: view all activities—innovation, experience, brand—through the lens of value and engagement with customers.

Businesses must accept the limitations of placing blind-faith in innovation and brand. They must keep customers engaged, without sacrificing the quality of the experience, while they develop new products and grow into new markets.

The successful businesses will be the ones that learn to navigate the most efficient course, keep the passengers happiest, build a faster engine, all while keeping the plane in the air. They will use a new playbook that begins with understanding the strategic role of experience and how to use it to design products, services, and customer interactions accordingly.

This playbook has a name: experience design. It’s based on a simple idea that everything a business does should be based on the following assumptions:

an engaged customer is worth more than a loyal customer

engagement comes from meeting expectations, which means being relevant, which means providing value

it’s more expensive to acquire a new customer than to keep an existing one, so figure out how to grow value for existing customers while they still are customers.

Experience design is not a checklist, a recipe, or a series of maneuvers; it is a way of thinking. It uses brand as a compass for identifying differentiated value and experience. It considers how products, services, and solutions play a role in delivering value over time and how this must be accounted for even in the early phases of innovation or the product design process. It considers all stages of the customer journey as opportunities to provide value and further engage customers. And it brings the concept of time to the table as a way of exploring options, innovation, implications, and interdependencies.

Experience design doesn’t replace innovation. It complements the efforts. Innovation should augment and extend the current portfolio and brand. Innovation for existing products, services, and customer experiences is low-hanging fruit and doesn’t require hiring innovation consultants. It starts with visibility into how you act and then fixing problems and enhancing strengths.

Deeper innovation efforts can begin by looking at the interface between what is changing at the limits of value you provide and the emerging needs of your customer, since you will use value to drive adoption. And innovation can’t occur in a vacuum. It’s never to soon to start planning for how a new product or service integrates along the lifetime of the customer relationship.

Experience design doesn’t replace brand strategy, but pushes beyond the traditional approach of defining brands. It advocates using the concept behind the brand as a way to identify and define value for customers in ways that can be differentiated in the way that products and services deliver value. And this becomes the purpose and intent of the business—to deliver products, services, and experiences that deliver the value that the brand represents, as a way of giving the brand meaning.

But it also means measuring that value from the customer’s perspective, and continually investigating new areas of value that are natural extensions for the brand. When you look at the world in this way, it becomes easier and more natural to proactively identify gaps between what a customer may need or expect, and what they are likely to get. And this can also become a framework for ongoing evaluation and modeling change as new products and services are considered.

Experience design provides a way for the business and the designer to both discuss objectives and options. It creates a way for businesses to invite design to the table earlier, and understand how design can help solve problems. And it also helps businesses rethink how they engage design partners in ways that are more likely to produce success with less risk.

It’s time to start the conversation about how the integrated view of experience design can change how we pose and solve the problems ahead.

At least, that’s what my gut is telling me.

About the Author

Patrick Newbery is Chief Strategy Officer at Method, GlobalLogic’s product experience agency. Patrick was a key member of the founding team that defined the vision for Method and has been involved with the company since its inception. He oversees many aspects of the business, including business development, brand and business strategy, as well as directing creative teams in the development of digital and analog design project. Patrick is the co-author of Method’s new book Experience Design, which provides a new way for business and design to collaborate by explaining how to integrate brand, value, and customer experience to build engagement. Take a peek here.